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News Now

Washington
Interchange changes would carry steep price for consumers CU CEO warns
WASHINGTON (10/26/09)--NARFE Premier FCU President/CEO Anthony Walker has warned that “cardholders would pay a steep price” if merchants succeed in getting Congress to alter the current interchange fee structure. In a viewpoint published in American Banker, Walker, who leads the Alexandria, Virginia-based, $123-million-in-assets, 10,000-member credit union, said that while merchants claim that they are looking to protect consumers and offer them lower prices on items that they purchase from retailers, “what it's really about is protecting their profits and shifting costs to the general consumer.” While Merchant representatives that recently testified before the House Financial Services Committee said that their constituents would give back to consumers “in different ways, depending on things like costs, competition and their own economics,” Walker focused on one potential perk that the Merchants Payment Coalition reps promised for purchasers: “free gift wrapping.” Walker also detailed the “huge benefits” that merchants receive due to their acceptance of credit and debit cards, saying that they are able to “outsource their credit risk to financial institutions who issue those cards and are left ‘holding the bag’ if a customer doesn't pay their bill” at a price of “less than 2 cents on a dollar.” “Merchants get protection from fraud and theft, guaranteed payment, efficient record keeping and faster checkout,” and also benefit from “higher sales” since “consumers aren't constrained by the amount of cash they have in their wallet” when they make purchases, he added. Saying that interchange reflects a merchant's fair share of the costs of the convenient card system, the Credit Union National Association has fiercely opposed any merchant-proposed changes to the current interchange fee regime, and has launched its own interchange grassroots advocacy campaign which will advocate credit union views on interchange through thousands of postcards to Senators in Washington.


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